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EBay's Stock Jumps Thanks to Double-Digit Revenue Gains

Tricia Duryee — Wed, 18 Apr 2012 20:51:19 +0000

EBay easily exceeded expectations in the first quarter, reporting double-digit gains for both revenue and income.

In after-hours trading, the stock was up 7.3 percent, or $2.63, to trade at $38.50 a share, exceeding its 52-week high.

The company said first quarter revenues totaled $3.3 billion, an increase of 29 percent year over year. For the same period, net income totaled $570 million, increasing 20 percent.

EBay attributed the strong results to momentum in its traditional marketplaces business, PayPal and the recently acquired GSI Commerce division. (See below for notes from the earnings call.)

In a statement, CEO John Donahoe said: “We believe that innovation in retail today is technology driven, and consumers are embracing smarter, easier, better ways to shop. We are enabling commerce in this new retail environment, supporting and partnering with sellers of all sizes and giving consumers worldwide the ability to shop anytime, anywhere, for whatever they want.”

The results trump both what analysts had been expecting and what the company was estimating internally.

Analysts, on average, had expected eBay to report earnings of 52 cents per share on revenue of $3.15 billion, according to a poll by FactSet. Those expectations were on the high side of eBay’s own forecast, which was estimating revenue in the range of $3.05 million to $3.15 million, with earnings per share of 50 cents to 51 cents.

When forecasting, companies and analysts use non-GAAP earnings per share, which exclude some extraordinary expenses. On a non-GAAP basis, eBay reported net income of $725 million, or 55 cents a share.

Here’s a breakdown of how the three units performed:

Marketplaces

The division, which includes both its auction and full-priced merchandise, saw gross merchandise volume increase 12 percent year over year to $16 billion. In particular, its fixed-priced business grew 18 percent.

PayPal

PayPal revenue increased 32 percent year over year to $1.3 billion, driven by increased penetration on eBay as well as more merchant adoption.

GSI Commerce

The GSI business, which was acquired last year and provides services to third-party retailers, generated $715 million in merchandise sales, up 26 percent over the same period a year earlier.

In Q2, the company expects revenues to continue to grow in the range of $3.25 billion to $3.35 billion. It said earnings per share for the same period would range between 49 cents and 51 cents a share. Non-GAAP earnings would range between 53 cents and 55 cents.

The company also raised full-year guidance, saying that it expects revenues in the range of $13.8 to $14.1 billion, with GAAP earnings per share of $1.91 to $1.96.

Notes from the Conference Call:

EBay’s CEO John Donahoe joins the call, and is very happy to report that all of eBay’s businesses are performing well.
PayPal has opportunities online, on the mobile phone and, increasingly, offline. Donahoe noted that half of the payments division’s revenue came from outside the U.S. PayPal is being used for 76 percent of purchases on eBay, which achieves the company’s 2013 goal.
Donahoe wants to talk about innovation: PayPal is now available in 2,000 stores around the country by swiping a PayPal card or entering a mobile phone number and PIN. “We have signed contracts with several additional retailers and will deploy over the next year,” he said.
Donahoe brags that PayPal Here, which competes directly with Square, just launched and is already available globally (unlike Square).
Donahoe addresses the executive shake-up at PayPal. It included the exit of former President Scott Thompson and head of product, Sam Shrauger, to Yahoo. David Marcus is the new president.
The company’s marketplaces business is also growing, jumping 22 percent year over year, which Donahoe notes is faster than the e-commerce category overall. StubHub, the company’s ticket marketplace, also launched in the U.K.
And now, updates from GSI Commerce and X.commerce, the two divisions that are delivering services to retailers. They are also doing well! X.commerce, which is the newest, launched 2,000 new apps for retailers during the quarter.
In summary, Donahoe is pleased!
CFO Bob Swan is now giving a deadly boring recounting of the finances, despite the company’s stellar results.
EBay is increasing full-year guidance by $100 million on the top line and 5 cents on the bottom line.
In summary, Swan says he’s excited!
Now for the Q&A.
First question is about Home Depot and the rollout of payments to other retailers (of course, because it’s the sexy new thing …). Donahoe is very excited about it because it expands the opportunity for PayPal tremendously. He admits that consumers aren’t really using it because there’s been no advertising. In May, they’ll change that and try to get more engagement. In the interim, it is also working with other retailers, and in the second half of the year, they’ll be launching those as a way to test and learn. “I feel good about our progress,” he said. “We’ll be ready in 2013 and 2014 to roll out in new categories and internationally.”
Surprisingly good question from analyst: Will banks make eBay pay more for accounts tied to checking accounts in the future? The answer: They don’t worry about it and the Fed sets the rates. “We do not expect the Fed to make any changes to rates. If anything, we would expect the trend of going down to continue.” They also think they can use PayPal’s scale to get really competitive rates, and they have four more years left on the contract. In the worst-case scenario, even if its costs went up 5x, it’s less than a point of operating margin on PayPal, but they don’t expect that to happen.
Why is marketplaces doing better? Donahoe says customer retention is up, and over the past six months, they’ve been marketing. Active buyer growth is up 9.5 percent in core marketplaces business.

One Start-Up's Adventure in Figuring Out the Price of a Used Chair

Tricia Duryee — Wed, 28 Dec 2011 14:00:25 +0000

Priceonomics, a small company that aspires to be the Kelley Blue Book for everything, tells the tale of how it sold four used Aeron chairs to another tech start-up, for a profit of $300.

The Priceonomics Web site, which officially launched on Dec. 21, is aimed at helping sellers and buyers determine the best price for used bikes, cars, phones, TVs and other items, so no one gets ripped off.

But rather than explaining what it does in a press release, Priceonomics wrote an entertaining blog post, entitled “Adventures in Aeron Chair Arbitrage,” detailing its experiments with selling the expensive Herman Miller office furniture in San Francisco.

Trials included finding buyers among its start-up incubator classmates, finding the chairs on Craigslist, borrowing a girlfriend’s car to get them, negotiating a lower price, lugging the chairs back to the office, and then almost losing the sale in the end, when the seller’s $1,800 check didn’t go through.

Priceonomics concludes that a business based on hauling used furniture around won’t scale but that there is a need for a centralized location for pricing information.

From its blog post:

“It’s unlikely Priceonomics could build a massively successful business arbitraging used goods if we have to take possession of them. However, it was clear that having our price guides were really helpful for identifying what were the good deals on Craigslist and how much to pay for them. So for now, we’ll just stick to building better price guides to help other people buy things on Craiglist, eBay, and other emerging marketplaces like Zaarly and TaskRabbit.”

Priceonomics may be on to something here.

Not too long ago, one way to determine the fair value of an item on the Internet was through an online auction. EBay became wildly popular as an easy way for total strangers to agree on a price for an item. More recently, auctions have become less relevant, and even eBay is decreasing the alliance of used items on its site.

That’s due in large part to today’s free flow of information on the Internet, which makes pricing more transparent. After all, you can just Google it.

Still, determining the price of an item can be time-consuming. To get a good sense of the fair value, you have to cross-check prices on a handful of sites — if not a dozen.

Priceonomics’ price guide promises to help users easily find out if they are getting a good deal, by comparing items across eBay, Craigslist and even full-priced retailers that might be offering a deal.

So, how much is a second-hand Aeron chair worth?

In the end, Priceonomics says, the chairs resell for $400 to $600 in San Francisco. The company was able to acquire four, for $375 each; it then turned around and unloaded them for $1,800, representing a $300 profit.

eBay Commercials Coming to Let You Know "It's Not Your Mother’s eBay Anymore"

Tricia Duryee — Thu, 21 Jul 2011 00:19:52 +0000

EBay is kicking off a TV campaign in the next couple of months that is expected to help bring back consumers who may not have purchased anything on the site since the retailer was focused exclusively on auctioning off used goods.

The commercials, which will start running in the third and fourth quarters in the U.S. and Europe, will be designed to raise awareness around the brand, which has been a little overshadowed recently by PayPal, which has been considered to have larger growth prospects.

In an interview, eBay’s CEO John Donahoe told me that for the past few years, the company has been focused on improving the user experience, and when they saw a pick-up in spending from its current user base, it would begin to increase marketing.

It’s hit that inflection point, he said. ”It’s not your mother’s eBay anymore.”

While Donahoe promised that won’t be the company’s new tagline, he said the campaign will help people’s understanding of eBay. ”Seventy percent of our products are fixed price and 70 percent of our products are new items. A lot of people haven’t used it in five years, and still think that its an auction site focused on used items. We’ll use this to tell them what eBay is like,” he added.

The commercials also will be used to promote its mobile business, which is expected to hit $4 billion in revenues by the end of the year.

The San Jose-based company made the announcement in conjunction with its second-quarter financial results released today.

During the quarter, it surpassed its own expectations for the period and revised its revenue projections for the year, which now surpass most Wall Street expectations. In the first quarter, revenues totaled $2.76 billion, growing 25 percent over the same period a year earlier when revenues totaled $2.2 billion.

However, any potential lift in profits was offset by acquisition costs.

The company reported a second-quarter profit of $283 million, decreasing 31 percent over the year-ago period when it made $412 million.

The company has been on a shopping spree of its own, buying six companies in six months.

Most recently, it purchased Zong, a carrier-billing provider, for $240 million in cash. Its largest acquisition in that period was of GSI Commerce, which provides services to merchants and brands, and cost more than $3 billion. GSI Commerce will make up its third business unit after eBay and PayPal.

eBays stock price traded down 59 cents to close at $33.17 a share, before the release was sent out after normal trading hours.

Borders to Shut Down

Mike Spector — Mon, 18 Jul 2011 21:30:08 +0000

Borders Group Inc. said it would liquidate after the second-largest U.S. bookstore chain failed to receive any offers to save it.

Borders, which employs about 10,700 people, scrapped a bankruptcy-court auction scheduled for Tuesday amid the dearth of bids.

The chain said it will ask a judge Thursday to approve a sale to liquidators led by Hilco Merchant Resources and Gordon Brothers Group.

The liquidation of the company’s remaining 399 stores could start as soon as Friday, and the chain is expected to go out of business for good by the end of September, the company said.

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Nortel Patents Go to Group That Includes Apple, Microsoft, RIM and More

Ina Fried — Fri, 01 Jul 2011 05:48:46 +0000

Nortel said late on Thursday that its portfolio of more than 6,000 patents has been sold for $4.5 billion to a consortium of tech companies made up of Apple, EMC, Ericsson, Microsoft, Research In Motion and Sony.

“Following a very robust auction, we are pleased at the outcome of the auction of this extensive patent portfolio,” Nortel Chief Strategy Officer George Riedel said in a statement. “The size and dollar value for this transaction is unprecedented, as was the significant interest in the portfolio among major companies around the world.”

The winning bid requires approval of both U.S. and Canadian courts, which the company will seek at a joint hearing expected to take place on July 11. Nortel said it will work with the winning bidders in an effort to close the sale in the third quarter.

The consortium won the bidding, but a number of other players had publicly expressed interest or were believed to be interested in the patents, including one of the eventual winners — Ericsson — and Google, which had placed the initial $900 million bid to begin the auction process. Google had justified its initial bid by saying that patents are necessary given the increasingly litigious environment these days.

Google, as well as its hardware partners, face a number of lawsuits related to Android. Apple, for example, has sued HTC, while Oracle has sued Google directly and Microsoft also has claimed Android hardware infringes on its patents, suing both Motorola and Barnes and Noble.

The patents covered a broad range of areas, Nortel said, including all manner of telecommunications and networking technologies — wireless and 4G wireless, among others — as well as additional areas such as Internet search and social networking.

Even with the cash haul, Nortel said it still doesn’t expect to have any remaining value for common shareholders once it completes its bankruptcy protection hearings.

Apple and Intel Could Raise Ante in Google's Play for Nortel Patents

John Paczkowski — Fri, 17 Jun 2011 21:53:49 +0000

Earlier this week Nortel postponed the bankruptcy auction for its collection of 6,000-plus wireless patents by seven days, citing a “significant level of interest” in them. Now the source of that interest has been identified: Intel, Ericsson AB and patent risk solutions provider RPX, who’ve all been accepted as qualified bidders in the June 27 auction.

Also qualified as a bidder: Apple, which, as AllThingsD reported back in December, has been sniffing around Nortel’s IP for months now.

With these four participating in the auction for Nortel’s portfolio, it seems almost certain Google will have to raise its $900 million “stalking-horse bid” if it hopes to prevail. Already some private equity investors are saying the final price on the patents may reach $1.5 billion if a real bidding war erupts over them.

Confirmed: Microsoft Will Announce Acquisition of Skype Tomorrow Morning

Kara Swisher — Tue, 10 May 2011 03:14:16 +0000

The Wall Street Journal reported earlier tonight that Microsoft–in what would be its most aggressive acquisition in the digital space–was zeroing in on buying Skype for $8.5 billion all in with an assumption of the Luxembourg-based company’s debt.

Sources told BoomTown tonight that the deal for the online telephony and video communications giant is actually done and will be announced early tomorrow morning.

The purchase–which has been spearheaded in closely held negotiations by Microsoft CEO Steve Ballmer, with an assist from Business Division CFO Amy Hood and top dealmaker Charles Songhurst–is a bold move for the software giant and its biggest acquisition in more than three decades.

The big price will give Microsoft–which has struggled in its online efforts and has lost billions of dollars for its work–a big brand name on the Web.

With Skype, which has been aggressively expanding, Microsoft will continue to lose money in its Internet efforts. Skype lost $7 million on revenue of $860 million. Operating profits, which Skype preferred to highlight, were $264 million.

And–let us not forget–Skype’s debt is $686 million. Silver lining: That’s slightly less than Microsoft’s Online Services division losses in its most recent quarter!

But, sources said, the concept is bigger than just money, including getting access to Skype’s 663 million registered users.

Skype, which had been headed bumpily toward an IPO until now, will apparently be integrated into Microsoft’s Windows Live and other online communications efforts in both the consumer and enterprise arenas, sources said.

Think Kinect connecting.

Skype has had a big-company owner before–eBay Inc. paid $2.6 billion in cash and stock for it in 2005, as a way for the auction site’s buyers and sellers to communicate.

A 70 percent stake in Skype was sold in 2009 to investors such as Silver Lake Partners, Andreessen Horowitz, and the Canada Pension Plan Investment Board. It then valued Skype at $2.75 billion.

So, obviously, the deal is a big win for them. In addition, at the time they made their investments, Skype was a huge legal mess with lawsuits flying.

Skype has since gotten cleaned up enough to attract Microsoft.

Other suitors have looked at Skype, including Google, although acquisition interest by Facebook was very much overblown, said several sources.

Interestingly, Microsoft’s new smartphone partner Nokia also held meetings with Skype’s CEO Tony Bates, a former Cisco exec who arrived at the company last fall.

Interest in Skype by Microsoft was first reported by GigaOm’s Om Malik on Sunday.

Tune in at 5 am PT for the official press release, apparently, and lots and lots and lots of analysis of whether Microsoft paid too much for Skype.

Google May Have Company in Bid for Nortel's Patents

John Paczkowski — Thu, 05 May 2011 22:37:18 +0000

Now that Nortel Networks has been given the nod to go ahead with its IP auction, new bidders are emerging for the collection of 6,000-plus wireless patents. Which means Google may have to raise its $900 million “stalking-horse bid” if it hopes to prevail in the auction. “Patent risk solutions provider” RPX recently expressed interest in the Nortel portfolio, says Bloomberg. And Research In Motion is said to be mulling a bid in the June 20 auction as well.

Yahoo Bored Meeting? Not This Time!

Kara Swisher — Wed, 13 Apr 2011 16:35:48 +0000

Today and tomorrow, Yahoo’s directors are gathering here in Silicon Valley for one of their regular meetings that take place over the course of the year.

While board meetings in general are usually pretty dull affairs–and Yahoo’s, in particular, are typically glacial ones–there is a lot on the plates of those with purview over the machinations of the long-struggling Silicon Valley Internet giant.

Here’s a primer of what might (and might not) be happening, according to sources, of course, as Yahoo continues on its quest to reinvigorate itself–a journey that is beginning to make Siddhartha’s transformation into Buddha enlightenment look speedy.

A Yahoo spokeswoman declined to comment on anything below, although I did run it all by them.

The U-Shaped Turnaround

At Yahoo’s recent sales meeting in San Antonio, CEO Carol Bartz went all Sesame Street on the troops, using the letter “U” as an illustration to indicate where in the cycle the company was in its turnaround.

Apparently, just on the other side of the very bottom of the letter, heading inevitably upward.

Her argument was that the company has finally cleaned up its platform mess and its confusing corporate structure, and that its display and search advertising business is now recovering nicely.

All true, except there are some other key issues, such as the slowness of the search and online advertising partnership with Microsoft to make some serious hay.

In fact, although its display business will show a definite strong recovery in Yahoo’s quarterly results next week, its search business–both in market share and revenue per search (RPS)–has, as one person close to the situation put it succintly, “fallen off the cliff.”

That’s due, in part, to getting the new system with Microsoft delivering better results, which is not happening yet (if ever!).

In this quarter, Microsoft has honored its contractual guarantees and will make up the difference–which will result in masking the magnitude of the RPS loss. It’s a worrisome trend to watch.

The Asia Situation

Yahoo and its Asian partners are still mulling over various options regarding the company’s large ownership stakes there.

What is happening with its share in China’s Alibaba Group, according to sources, is precisely nothing right now, as has been made clear in recent comments by its CEO and co-founder Jack Ma.

“If you cannot make the business cool, you have no right to be angry with me,” said Ma in an article in Forbes published this week, referring to Yahoo. “I just don’t trust them…I’ve been working with them for years, and I’m disappointed.”

Relations between Ma and Bartz, sources said, remain as bad as ever, and even the normally close one between Ma and Yahoo co-founder Jerry Yang is strained.

Plus, Ma told Forbes, as he has said before, Alibaba is not taking its auction site, Taobao, public–leaving Yahoo in possession of an appreciating but decidedly private asset.

Japan is a different story, with the disposition of Yahoo’s stake in Yahoo! Japan the subject of long and continuing negotiations for a while now.

While the earthquake and tsunami crisis there did slow discussions down, there is still active recent movement about a variety of cashing-out scenarios, all of which have massive tax and regulatory issues.

Without boring you with the specifics, one option is to create a tracking stock, another a spin-off of the asset and still another some sort of stock trade.

But no matter what happens, Yahoo will have to pay some sort of taxes on its 35 percent stake in Yahoo! Japan, now worth $8 billion.

But if its CFO Tim Morse–the key figure working on the deal–can pull it off, what will Yahoo do with all that money?

Acquisition Guns Blazing? Or Sputtering?

In a recent forum in Silicon Valley, one of its M&A minions said Yahoo had its “guns blazing” with regard to acquisition activity in 2011, as deliciously reported in The Wall Street Journal, despite the company’s lackluster acquisition record.

Sources said the exec had his ears soundly boxed by his managers for the dopey remarks, since Yahoo has had such a lackluster record in the arena–especially compared to others.

And, oh yes, Yahoo’s M&A head just decamped to gaming phenom Zynga.

That aside, Yahoo should be deep in the market for hot start-ups to help revive its innovative spirit, but it remains hindered by a continued reluctance by new start-ups to join it and by its reputation for being a place where entrepreneurs go to die.

That certainly could change at any time with the right execs in place, but Yahoo is competing with a plethora of more exciting companies and also a seemingly endless venture capital gusher of cash of late.

While it is the board’s job to approve acquisitions and not source them, perhaps it is its job to pressure Bartz and other execs to get off the stick and hit at least one of the targets Yahoo aims at.

Targets are plentiful in advertising, content and even social, with many start-ups playing right into a lot of arenas Yahoo needs some help.

And help it does need as talent keeps walking out the door daily, mostly to hotter prospects such as Zynga and social buying sites Groupon and LivingSocial.

There is no question it is hard for any large company to hold onto top staff when there are so many enticing bonbons out there as options, but it can be done.

One good thing: Its newish head of product Blake Irving and head of U.S. media and advertising Ross Levinsohn seem to be playing well together and are setting a tone of stability that is much needed.

Enter the Kenny

That said, there remains endless swirl, especially with key investors, about the performance of its CEO.

While she started off as a publicly in-your-face exec, Bartz has definitely stepped out of the limelight of late, as her pugnacious manner started to irritate Wall Street and others.

It was a good idea, since it has taken the focus off the lack of stock and revenue progress she had loudly promised.

Still, Yahoo shares have continued to stay locked in the mid-teens, as investors wait for some sign that Bartz’s turnaround has worked.

The entrance of its spanking new director, Akamai President David Kenny, has further increased speculation about management and board changes at Yahoo.

This is Kenny’s first board meeting, but this well-connected newbie is someone who is clearly going to rise quickly to the top of decision-making at Yahoo.

That’s because the smooth and well-liked Kenny, who also has deep advertising experience as founder of the Digitas agency, has a long relationship with Yahoo and also with Yang.

He also now has much more tech cred as a leader of one of the Internet’s most important infrastructure companies, with a ton of regular contacts with media giants, ad networks and video providers that are Akamai’s clients.

In other words, Kenny (pictured here) is the full package of ad and tech experience that would make him an obvious Yahoo CEO candidate when Bartz’s contract is up in early 2013, if not before.

He’s also the person most likely to take over for longtime BoomTown punching bag Roy Bostock as chairman of the board at some point.

None of this is happening soon, but it is clearly an interesting development.

There are other machinations, of course, from continued interest from private equity players in Yahoo, as well as a variety of takeover scenarios, each more complex than the next.

While often derided as yesterday’s news by the elite of Silicon Valley as on an inevitable downward path, those plots are there because Yahoo remains a stellar brand with consumers worldwide and an Internet property with huge traffic and a big ad business.

In other words, it’s a U that someday maybe could be a V.

Got Any Old IP Addresses? Need to Raise Cash? You May Be in Luck

Arik Hesseldahl — Fri, 25 Mar 2011 13:30:43 +0000

Only a select few concerned with the most arcane details of the Internet’s internal plumbing were concerned when the world ran out of IPv4 addresses. These, of course, are the Internet Protocol addresses that coincide with domain names: 72.233.2.53, for example, is ours.

The fact that they’re now rare makes them valuable. In fact, Microsoft has just paid $7.5 million to buy some 666,000 addresses from the assets of the bankrupt Canadian networking company Nortel.

You may remember that the world ran out of these addresses last month when the Internet Assigned Numbers Authority handed out the last batch of the 4.5 billion or so addresses under its control. Who knew the Internet would ever need so many?

A new numbering system called IP version 6 or IPv6 is coming soon with lots more room for addresses. The theoretical number of addresses that should be available is 340 undecillion. (Yes that’s a real number, a 340 followed by 36 zeros.) That ought to be plenty of space. The problem is that it’s taking forever to get it up and running.

But in the meantime, the world is still relying upon the old-school IPv4 addresses and they’re scarce, hence valuable. Microsoft paid $11.25 each for these addresses, and it stands to reason that there are scores of companies and entities out there with blocks of addresses that are in various states of disuse. Something tells me this isn’t the last deal of this kind.

EBay Drops the Price to Free for Up to 50 Auction Listings

Tricia Duryee — Tue, 15 Mar 2011 16:25:41 +0000

EBay said Tuesday that for the first time ever, it is making it free to list up to 50 items a month on its auction site and that it will be free to add the “Buy it Now” option. Prices will be effective starting April 19. The promotions are designed to drive increases in both new listers and listings. Currently the prices for the service vary by the starting price of the item. If someone were listing 50 items a month at the highest price and added Buy It Now to all of them, the current cost would be $112.

Proposed Spectrum Auction Could Net $36 Billion, Study Finds

Arik Hesseldahl — Tue, 15 Feb 2011 12:45:35 +0000

Last week President Obama outlined a plan to auction off a big swath of wireless spectrum currently in the hands of TV broadcasters for over-the-air programming that could be repurposed toward creating a national wireless broadband network. The president said the auctions would raise about $28 billion, which would be enough to cover the costs of the $19 billion network he’d like to build, with the remainder going toward deficit reduction.

Today the the CTIA, the wireless industry trade organization, got behind the president’s plan in a big way, and suggested that the proposed spectrum auctions could bring in billions of dollars more than the president said. Using data from 13 prior spectrum auctions as a model, the organization today released the findings of a study conducted in partnership with the Consumer Electronics Association saying that an auction of 120 MHz worth of spectrum could produce revenue in the range of $36 billion to $48 billion.

The study also found that only in the top 30 markets in the continental United States will TV stations actually have to exit certain spectrum ranges to clear up sufficient spectrum for wireless broadband. In most cases, TV broadcasters will probably be satisfied with incentive auctions that give them some portion of the proceeds raised from the auctions. In a few cases it will be trickier, and the study suggests a few options like channel-sharing and repacking. Broadcasters outside the top 30 markets should not have to give up any spectrum, the study says.

The point of the study, CTIA president Steve Largent told me, is to help nudge Congress toward passing a law that will allow the Federal Communications Commission to hold incentive auctions that can help spur TV broadcasters who currently have the licenses for the spectrum. So far, broadcasters have signaled that they’re not yet entirely willing to go along with this plan. “We think this can be relatively painless for the broadcasters, but it’s still going to take a lot of work at Congress and at the FCC to get it done,” Largent said.

That the wireless industry would be getting behind Obama’s plan is no surprise given their exploding spectrum needs for data services, so there is a bit of a grain-of-salt element to the study’s findings. However it’s also a solid signal that the wireless carriers are willing to bring serious cash to bear for spectrum, which is, generally speaking, good news for all concerned.

Broadcasters are understandably taking a cautious line. In a statement issued last week in response to Obama’s speech in Michigan, Dennis Wharton, executive vice president of the National Association of Broadcasters said, “Let’s not forget that broadcasters returned more than a quarter of TV station spectrum to the government less than two years ago, and that much of that spectrum has not yet been deployed. NAB is not against the President’s plan. We will work to ensure that incentive auctions remain truly voluntary, and that broadcasters who don’t volunteer to return spectrum–and the millions of viewers that we serve–are held harmless.”

Who Wants Nortel's 4G Patents?

John Paczkowski — Mon, 13 Dec 2010 11:15:10 +0000

Nortel was once a cornerstone of the telecom industry. These days it’s little more than an estate sale, a now-bankrupt company auctioning off the valuables of a fallen titan.

Last year, Nortel sold its optical networking and carrier ethernet business to Ciena for $769 million and its wireless business to Ericsson for $1.3 billion. Soon it will sell off its patents as well, among them some thought to be essential 4G wireless technologies like Long Term Evolution (LTE) and Service Architecture Evolution (SAE).

And that IP is drawing a lot of interest from the likes of Research in Motion, Nokia, Google and Apple, none of which want to see it in the hands of a rival, particularly as 4G’s commercial availability broadens. Sources tell me all four companies are participating in the auction, and Reuters reports that final bids are due in a matter of weeks. Said one source, “Whoever buys these patents is buying a hell of an advantage.”

Reached for comment, Apple and RIM declined. Google and Nokia did not respond.

Court Says eBay Sales of L'Oréal Samples Breach Trademark

Frances Robinson — Thu, 09 Dec 2010 22:14:28 +0000

EBay Inc. may have to change the way it protects L’Oréal SA’s trademarks after Europe’s highest court said Thursday that the cosmetics company can prohibit the sale on the auction site of free samples and products intended for outside Europe.

However, the European Court of Justice’s advocate general, Niilo Jaaskinen, in giving his opinion, said eBay could continue to purchase advertising keywords, including L’Oréal trademarks, in order to direct users of Internet search engines to its site.

The ECJ said L’Oréal can prohibit the sale of “testers and dramming bottles, often marked with the words ‘not for sale’… supplied without charge to the trade mark proprietor’s authorized distributors,” because they “cannot be considered as being goods put on the market with the consent of the trade mark proprietor.”

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When You Wish Upon a List

Katherine Boehret — Wed, 01 Dec 2010 05:05:26 +0000

It’s official, the holiday shopping season has begun and it’s time to get serious about gift lists. This week, I took a closer look at some online services that could help you—or those shopping for you—find and buy the right gifts.

While there are many services around, I’ll just touch on a handful of them, including some that take advantage of social networking and group buying.

[ See post to watch video ]

Bing, Microsoft’s search engine, is jumping into the wish-list action this holiday season with the Bing Shopping List. Starting Wednesday, this feature lets people add items to a saved wish list by simply check-marking an on-screen box in shopping search results. Shopping search results are displayed by clicking the Shopping tab in Bing search results or by selecting Shopping on Bing.com and going from there. Once an item’s box has been checked, a small, in-browser visual of all items added to the wish list is displayed in the lower left corner of the browser window. Lists are saved between sessions, so you can close your browser and open it another time and work with the same saved list.

In addition to collecting a list of wished-for items, the Bing Shopping List lets people share those lists with their Facebook friends, giving them a chance to see and buy items from someone else’s wish list. Or people can use Bing Shopping Lists to select just a couple items, share them with the Facebook community, and ask for friends’ opinions about which product is better. Users may get feedback from friends they wouldn’t otherwise know were experts in certain areas.

A Microsoft spokesman said the impetus for this came from trends the company saw taking place on the Web—specifically, people using Facebook to solicit opinions about what to buy and to tell others what they want.

A downside to the Bing Shopping Lists is that they don’t yet offer a way to share items with only certain people, which might mean sharing a private gift with all your Facebook friends. And you can’t yet create multiple lists. A way to share items with only certain people and options for create multiple lists are on the product road map for next year, according to a company spokesman.

Speaking of social networks, Sears is taking a unique approach to the group-buying concept with Wish Together, a program launched in mid-November. With Wish Together, Sears puts at least one new item on its Facebook page (facebook.com/sears) each day. If enough people click on the item’s “Like” button before a certain time, a steep discount on the item becomes unlocked, like a diamond necklace that originally cost $285 will cost $100 at its Wish Price if it gets the required 200 “likes.” People can see the number of necessary “Likes” and time remaining (down to the second) displayed on the item’s Wish Together Facebook page.Once a Wish Together deal is unlocked, it’s available to everyone—not just those who originally “liked” it. But those who “liked” the item get an email notification from Facebook as soon as the deal is unlocked so they can buy it while supplies last.

Bing is jumping into the wish-list action this holiday season with the Bing Shopping List

The tried and true Amazon Wish List, which has been around for 11 years, can be used to add wish-list items from any website, not just Amazon.com. This works using the site’s Universal Wish List. It can be set up by dragging an “Add to Wishlist” bookmark (http://3.ly/G82n) into your browser’s bookmark bar. Then you just click the bookmark whenever you’re on the specific Web page of an item you’d like to add to your Wish List. A small pop-up menu lets users designate a specific Amazon Wish List or add their own notes about an item. Universal Wish List browser extensions, or shortcuts built right into a Web browser, are available for Google’s Chrome, Apple’s Safari and Mozilla’s Firefox browser. Some online retailers like ModCloth.com, save you a step by offering “Add To Amazon Wish List” buttons right on their websites. Amazon Wish Lists can be shared to friends through Facebook or Twitter using a link on the list’s webpage.

There are many Facebook apps for creating wish lists and sharing them with Facebook friends. I tried a couple apps, including a basic one called Fulfill My Wishlist (http://3.ly/3u3d). It let me search a shopping portal (that uses Google Shopping in the background) for items to add to my wish list, or let me copy and paste a link for any item to appear in my list. A notes section for each item allows room for describing details like preferred size or style. This list can be emailed to friends or viewed through the Facebook app by friends who use it.

If you’re planning to go in on buying a pricey gift with several other people, a group-gift option like eBay’s might be the right tool for you. EBay introduced its Group Gifts feature (groupgifts.ebay.com) in November. It lets several people pool their money to buy one item without one person chasing down those who owe money.

One person chooses an eBay item and selects the Buy It Now option (auction prices aren’t applicable when you need to tell the group how much they’ll definitely owe). The initiator tells the group how much he or she will pay and then shares the item with others via email, Facebook or Twitter, in hopes of getting contributions. A PayPal account is required for at least one person in the group to ultimately pay for the item, but gift contributors can chip in using credit or debit cards, and they can add their own notes to a gift.

Thanks to technology, there are many ways to direct your friends and family toward exactly what you want for the holidays, taking much of the guesswork out of giving and receiving this year.

Edited by Walter S. Mossberg

Write to Katherine Boehret at mossbergsolution@wsj.com

Viacom to Unload Rock Band Unit

Sam Schechner — Fri, 12 Nov 2010 00:57:41 +0000

Viacom Inc. is telling the band to pack up and go.

The New York-based entertainment company is preparing to unload its Harmonix videogame division, maker of the popular “Rock Band” line of games.

Viacom on Thursday reported profit for the latest quarter fell 59 percent after it took $260 million in write-downs related to Harmonix, which has long been a drag on the bottom line.

Harmonix has been on the block since September, and Viacom is now in deal talks with both videogame companies and private-equity firms, according to people familiar with the matter. Viacom is expected to hold an auction, and as many as four companies might participate, one of those people said.

Viacom bought Harmonix in 2006 for $175 million, and made an additional $150 million payment in 2008 as part of the deal. But for much of that time the unit has been locked in brutal competition with rival game “Guitar Hero,” from Activision Blizzard Inc., which is roughly 60 percent-owned by Vivendi SA.

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Obama Plan Would Double Available Wireless Spectrum

Voices — Mon, 28 Jun 2010 18:12:32 +0000

In a move that would provide some breathing room for burgeoning commercial wireless traffic, President Obama plans to scrounge up 500 megahertz of fresh spectrum for auction, a move that would double the available spectrum over the next 10 years. Today the president is ordering a survey asking federal agencies and private licensees–like broadcast and cable companies–to identify any chunks of spectrum they can spare or share. Proceeds from the auction would go toward improving public safety communications systems.

For more on the administration’s perspective on U.S. broadband needs, watch this video of Walt Mossberg interviewing Federal Communications Commission Chairman Julius Genachowski at the D: All Things Digital conference earlier this month.

[ See post to watch video ]

EBay CEO John Donahoe at D8: More Mobile Shopping and Payment Options

John Paczkowski — Wed, 02 Jun 2010 18:25:09 +0000

A few years back, John Donahoe’s position was an unenviable one. As incoming CEO of eBay, he was taking the reins of a company that, while the clear leader in the online auction space, had seen growth stall amid increased competition from formidable rivals like Amazon.com, as well as from upstart auction sites like Etsy. And his first efforts to reinvigorate the company’s business by tweaking its marketplace and auction listings to be more like Amazon’s met with some vociferous blowback from eBay’s core sellers.

But much as they irritated, those changes seem to have had a positive effect on eBay’s business. In its most recent quarter, eBay (EBAY) showed modest growth, narrowly beating analysts’ estimates thanks to some impressive growth in its PayPal online payment business. Add to this Donahoe’s unloading of most of Internet calling service Skype, a much criticized acquisition engineered by his predecessor, Meg Whitman, and his revamp of the company seems to be gaining momentum. But is it enough to reinvigorate eBay’s business and fend off Amazon (AMZN)?

Liveblog

11:31 am: A first question from Walt. You’re viewed by people as a sort of Web 1.0 company, and you’re all about auctions. Today you seem to be morphing into more of a no-haggle auction store, a buy-it-now venture.

Donahoe: We’ll never be a retailer. Initially, eBay started selling long-tail inventory and they sold it in an auction format and that made sense at the time. Today, eBay is 30-35 percent auctions. A lot of the inventory on eBay today is brand new. Now they’re not necessarily the same items you’d get in a retail store….But what you have on eBay that you don’t have anywhere else are items that have been returned or refurbished, items that are cheaper. EBay gives you a choice of inventory.

11:36 am: Walt–Do consumers get that? Do they understand that you’re only 30 percent auctions now?

Donahoe says they do. “I think perception does lag reality; I think there’s more inventory than people are aware of, but we’re correcting that….What eBay is very good for is if you have bulk inventory, we’re a good way to get rid of it.”

11:37 am: Walt asks about eBay’s other businesses: PayPal and Skype. Skype seems to be bigger than ever these days. Why couldn’t you make that work?

Donahoe says Skype is a fantastic business. But the challenge was one of focus. “In the Internet today, you can’t be all things to all people….And we didn’t have synergies with Skype…so we sold a portion of it.”

Walt–Well if there wasn’t synergy, why did you buy it?

Donahoe says that at the time eBay made the purchase there appeared to be synergies and the company hoped to make good use of its technology, but that didn’t quite pan out. “I’m not sorry we made the acquisition,” he said. “And I’m not sorry we divested it either.”

11:41 am: What’s the point of PayPal, asks Walt.

Donahoe: What PayPal’s done is to provide consumers with a safe way to make purchases online.

Walt jumps in and notes that it’s just as easy these days for people to use their credit cards. So why bother with PayPal?

Donahoe notes that things like cash and credit cards can be lost. PayPal cannot. “It’s a digital wallet,” he says, adding that he expects mobile payments to come into broad use within the next three years.

11:44 am: Continuing his riff on PayPal, Donahoe talks about the PayPal iPhone app, which allows people to “bump” payments to one another. “I think the idea of the digital wallet will facilitate digital commerce growth and PayPal’s growth as well.”

11:46 am: Walt–How big is your phishing problem? I get emails fairly often warning me that my PayPal account is in trouble for some reason. You are the target of a lot of phishing, aren’t you?

Donahoe: Phishing was an issue for eBay a few years ago. But over the last five years, we invested quite a bit of money fighting it, and I think we’ve done a good job.

11:48 am: Walt–So who’s your main competitor?

Donahoe says the usual suspects–Amazon, Etsy, Wal-Mart (WMT).

11:49 am: Donahoe–Wal-Mart is the largest offline retailer in the world. Costco (COST) competes in the exact same segment with the exact same business model very successfully. So does Target (TGT). The same thing can happen online. Amazon can be successful and eBay can be successful, too.

11:50 am: Is the iPad another big platform for you, Walt asks.

“I think more devices are becoming part of the shopping experience,” says Donahoe. The line between online and offline is blurring and I think these new devices are enabling that. He adds that he thinks eBay’s iPad app is the best eBay experience he’s seen to date.

11:52 am: A quick poll of the audience–Who has an iPad? Quite a few folks, evidently.

11:53 am: Walt–You say the iPad app is the best eBay experience, but this is a new device. You’ve been on the Web for years. Why isn’t that the best experience.

Donahoe: The core eBay Web experience–in the last few years we’ve gone from a [score of] 2 to a 4. But we’ve still got a long way to go, and we’re still focused on making it the best eBay experience in the world. But these new devices allow us to start over and make new customized applications that help us serve users in the way that they want to shop.

11:55 am: Why so much focus on fashion?

Donahoe says eBay is the largest seller of fashion in the world. What we’re doing is driving more vertical shopping experiences on eBay, he adds. We’re trying to offer more customized experiences in different categories.

11:56 am: Walt asks about StubHub. There’s a lot of controversy over the secondary ticket market.

Donahoe: StubHub is a marketplace. It never buys tickets. What it’s doing is enabling season ticket holders to resell the tickets they aren’t using. Sometimes for above-market prices, sometimes for below-market prices. What StubHub has done that the scalper market never could, is that it’s completely transparent. You know who the buyer is, who the seller is, and StubHub guarantees every purchase. It provides complete transparency.

Q & A

Q: Can you talk about PayPal’s role in paying for content?

A: Digital is going to be a big opportunity for PayPal. If you go on Facebook, you can buy game credits with PayPal. In the media world, we’ll have payment solutions such that content providers can have a PayPal button on their content and people can use it to purchase it. It will provide a seamless experience inside the content itself. Digital’s going to be a big opportunity.

Q: What do you tell sellers who feel they’re being nickel-and-dimed by eBay’s many fees?

A: I think for years, eBay was nickel and diming. But over the past few years, we’ve restructured our fees. Today, consumers can list for free and businesses can list in the fixed-priced format. We’ve tried to simplify and streamline our pricing. We’re still cheaper than Amazon.

Q: Why do my PayPal purchases default to my bank account when I’d like to use my credit card? Will you move toward a model where consumers can choose how they pay through PayPal?

A: Consumer choice is important to us, says Donahoe, adding that the vision is to offer multiple means of payment.

A note about our coverage: This liveblog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations written and posted to the Web as quickly as possible. It is not intended as a transcript and should not be interpreted as one.

Google Gains Traction in Display-Ad Push

Jessica E. Vascellaro and Emily Steel — Thu, 11 Mar 2010 00:27:33 +0000

Google Inc. (GOOG) is signing up marketers to use its latest display-advertising technology, pressuring rival Yahoo Inc. (YHOO) and advancing the search giant’s effort to change the way ads are sold across the Internet.

Display ads, the eye-catching banner ads that appear atop and alongside most Web sites, have been under pressure as marketers question their effectiveness. Spending on banner ads fell 2.3 percent last year to $4.77 billion, according to eMarketer.

Google is championing a new stock market-like system for buying display ads. Using its exchange, ad buyers and sellers are matched to ad spaces in a real-time auction, allowing ad buyers to tailor where their ad appears based on the type of viewer they want to reach–and how much to pay for the space–on the fly.

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Study Group Time: Here Are the Legal Briefs for eBay-craigslist Trial Tomorrow!

Kara Swisher — Sun, 06 Dec 2009 20:09:25 +0000

The trial begins bright and early tomorrow morning in Delaware between online auction giant eBay and Web classified kingpin craigslist.

Since BoomTown is in a “Paper Chase” mood, I expect everyone to bone up on the legal issues of the Silicon Valley faceoff by reading the pretrial briefs below.

If not, as John Houseman playing Professor Charles Kingfield, said so memorably: “Here is a dime. Take it, call your mother, and tell her there is serious doubt about you ever becoming a lawyer.”

To review, here are the particulars of the case:

Fact: eBay holds a minority ownership position in craigslist (which was its first mistake, really).

Currently, the San Jose, Calif.-based eBay (EBAY) owns less than 25 percent, although it had acquired about 28 percent in a deal in 2004.

That dilution is what’s at stake here, with eBay filing a lawsuit last year against the privately held craigslist for making that happen, via a “coercive plan,” by issuing more stock and thereby causing eBay to lose its board seat.

Of course, craiglist has put forth its own lawsuit in San Francisco, alleging that eBay stole confidential information to create a competing classified service called Kijiji, and other misdeeds.

First up tomorrow will be former eBay CEO Meg Whitman–who is running for the Republican nomination for California governor and who takes the stand to talk about the original deal with craiglist.

She will be followed by eBay founder Pierre Omidyar and others.

So, here are the prebriefs from both companies to consider:

Pretrial brief for craigslist:

craigslist pre-brief –

Pretrial brief for eBay:

eBay_PTB_redacted –

Another Legal Tussle for eBay–And It's Not Skype This Time!–As Former CEO and California Guv Hopeful Whitman Kicks Off Craigslist Trial Monday

Kara Swisher — Fri, 04 Dec 2009 09:33:31 +0000

Auction giant eBay is headed to court again Monday, and for once, it has nothing to do with the litigious Skype co-founders.

Instead, it’s a battle in Delaware with craigslist, the San Francisco online classified powerhouse that eBay holds a minority ownership position in.

That stake is actually precisely what’s at stake. Currently, the San Jose, Calif.-based eBay (EBAY) has a less than 25 percent one, although it had acquired about 28 percent in a deal in 2004.

The company waged a lawsuit last year against the privately held craigslist for diluting its ownership position by issuing more stock and thereby causing eBay to lose its board seat.

That happened, alleges eBay, through a “coercive plan” by craigslist founder Craig Newmark and CEO Jim Buckmaster.

“We have acted in good faith as a minority shareholder,” said eBay spokesman Alan Marks. “We are simply asking the court to restore our original interest in the company.”

I sent a late email to craiglist’s rep and will post the reply if I get one.

Whitman–who is running for the Republican nomination for California governor–takes the stand on opening day Monday to talk about the original deal with craiglist.

She will be followed by eBay founder Pierre Omidyar.

Of course, craiglist has its own suit in San Francisco, alleging that eBay stole confidential information to create a competing classified service called Kijiji–a dopey name that BoomTown hereby rules someone should be arrested for thinking up–and other misdeeds.

But, so as to be consistent in its awkward legal messes, there is a Skype link: Current Skype President Josh Silverman had been the craigslist board member for eBay and played a key role in developing Kijiji.

Under Whitman’s leadership, ebay also bought Skype, in 2005, and sold a big stake recently.

It was a very controversial sale, which in turn, led to a series of ugly lawsuits from the Skype co-founders, which were just settled last month.

It will be interesting to see what Whitman, who has recently declared that the disastrous Skype acquisition was a good one, says about the craigslist debacle.

Perhaps she’ll say that eBay should have limited its investing during her watch to antiques and other fine collectibles?

Ciena Snags Nortel's Optical Business

John Paczkowski — Mon, 23 Nov 2009 13:30:28 +0000

Ciena is buying Nortel Networks’ optical networking and carrier Ethernet business after besting an offer from Nokia Siemens in a three-day auction. Ciena will pay $769 million for these assets from the now-bankrupt company, noting that they will significantly bolster its Internet infrastructure business. Given the way the market for Ethernet equipment has defied the econalypse, that will likely prove the case.

But the acquisition is not without risks. It poses a massive integration challenge for Ciena (CIEN), the likes of which the company has never dealt with before. As Jefferies & Co. analysts wrote in a research note this morning, “We can’t think of anyone in Ciena’s management team that has ever been involved in–much less integrated–an M&A deal like this.”

Scripps Books Travel Channel in $975 Million Deal

Peter Kafka — Thu, 05 Nov 2009 13:47:37 +0000

It’s official: Scripps Networks Interactive has won the Travel Channel auction. In a deal that values the channel at $975 million, Scripps will acquire a majority interest in the property while current owner Cox retains a 35 percent stake. News Corp. (NWS), among others, had been bidding for the channel.

The deal will be structured as a joint venture, and Scripps (SNI) will kick $181 million into the new partnership; it will then issue another $878 million in debt.

Scripps itself frequently pops up as an acquisition candidate, and that chatter has only gotten louder as a new wave of consolidation appears to be in motion, prompted by Comcast’s (CMCSA) pursuit of GE’s (GE) NBC Universal.

Scripps, which had planned on announcing quarterly results this morning, is pushing back its earnings call till tomorrow morning.

Here’s the full press release:

CINCINNATI–(BUSINESS WIRE)–Scripps Networks Interactive Inc, owner and operator of the Food Network and HGTV lifestyle television networks, will enter into a joint venture with Cox Communications Inc. by which it will acquire a controlling interest in the Travel Channel.

The two companies today signed a definitive agreement that, upon completion, will result in Scripps Networks Interactive owning 65 percent of the Travel Channel and Cox Communications retaining a 35 percent minority stake in the network.

The Travel Channel transaction is expected to be completed by or before January 2010.

“Combining the Travel Channel with Food Network and HGTV will make our fast-growing, young company the undisputed global leader in lifestyle programming,” said Kenneth W. Lowe, chairman, president and chief executive officer of Scripps Networks Interactive. “This collection of popular lifestyle networks will be in great demand worldwide and promises to create substantial long-term value for all of our stakeholders.”

Launched in 1987, Travel Channel has grown to become one of America’s best known cable television networks and today reaches about 95 million U.S. television households. The television network–the cornerstone of Travel Channel Media–supports a growing range of cross-platform initiatives including Internet, mobile and social media applications.

“Adding the Travel Channel, and its related enterprises, provides us with a unique opportunity to meaningfully expand our portfolio into a lifestyle category that’s highly desirable to media consumers, advertisers and programming distributors,” Lowe said. “Our vision for Travel follows the same script that’s made Food Network and HGTV two ofthe most powerful brands in all of television. By lending our unparalleled expertise in developing successful lifestyle media businesses, we have every confidence that we can build on Travel’s strong brand identity and leverage the successes achieved to date by the top-notch team at Travel Channel and our new partners at Cox Communications.”

As proposed, the transaction is structured as a leveraged joint venture between Scripps Networks Interactive and Cox Communications.

Cox will contribute the Travel Channel, valued at $975 million, and Scripps Networks Interactive will contribute $181 million in cash to a newly created partnership. The partnership, in turn, will take on $878 million in third-party debt that will be guaranteed by Scripps and indemnified by Cox, with the proceeds to be distributed to Cox.

The transaction will result in the partnership having about $696 million in net debt.

“This solid partnership that we’re establishing today allows us to maintain an interest in Travel Channel while at the same time giving the network an opportunity to leverage the resources and expertise of a successful programmer like Scripps Networks Interactive,” said Cox Communications President Patrick Esser. “Scripps has an outstanding reputation as a company, an employer and a programmer. Over the past 15 years, Scripps Networks Interactive has built a portfolio of leading lifestyle programming brands, and we think this complementary expertise will be a boon to Travel Channel’s future growth.”

Scripps Networks Interactive will control the joint venture and the network will be run as part of the company’s growing portfolio of popular lifestyle media brands.

“The incredibly complementary nature of our lifestyle media businesses presents an abundance of opportunity to provide services for Travel Channel that will result in increased advertising and affiliate revenues and substantial cost synergies,” Lowe said. “We have extensive experience working with partners to build value over the long term. Among cable companies, Cox has an outstanding reputation for its vision and investment for the long-term success of its businesses. We look forward to partnering with them in this venture.”

Scripps Networks Interactive was advised on the transaction by Barclays Capital Inc. and Skadden, Arps, Slate Meagher & Flom LLP.

India Is Set to Begin Bandwidth Auction

R. Jai Krishna and Satish Sarangarajan — Mon, 26 Oct 2009 12:05:26 +0000

India will launch auctions on Jan. 14 to allot radio bandwidth for third-generation, or 3G, telecommunications services.

The government will hold a separate bandwidth auction for broadband wireless access, a document on the Department of Telecommunications Web site said Saturday.

The telecom department said it will auction about four blocks of radio bandwidth in most of the nation’s 22 telecom service areas.

It will offer three blocks each in the Uttar Pradesh (West) and Himachal Pradesh service areas, and two blocks each in the Delhi and Gujarat service areas.

The government is validating the frequency available across all circles for the auction, the department said. “Final details of the frequencies to be auctioned will be notified in the notice [that invites applications for bidding],” the note said.

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Universal Music Gets Slapped in Court. What Does This Mean for Veoh–and YouTube?

Peter Kafka — Tue, 15 Sep 2009 05:03:40 +0000

Just how big a deal was a federal judge’s ruling Monday in the copyright-infringement fight between Veoh and Universal Music Group?

Depends on who you ask, of course.

Executives at Veoh say Judge A. Howard Matz has given them a new lease on life, and at least some of the company’s investors are doing some chest-beating. Universal, the world’s largest music label, says it’s confident it will win an appeal.

You can get the same split opinion by asking two different companies that happen to be locked in a similar fight. Executives at Google’s (GOOG) YouTube, which is trying to fend off a copyright suit filed by Viacom (VIA), say the Veoh ruling bolsters their case. You can guess what Viacom says.

The gist of the fight: Universal says Veoh didn’t try hard enough to keep illegally uploaded material off the video site; Veoh says it made a good-faith effort. Matz agreed with Veoh and tossed out Universal’s claims.

Even if you disregard the posturing, it’s fair to say there’s a genuine debate over the ruling’s meaning. Veoh, along with some of my bloggy colleagues, is treating the decision as the final word on Web copyright disputes, or at least those that involve the Digital Millennium Copyright Act.

And Matz certainly slapped Universal around. But it’s worth noting that copyright owners have lost Web cases in the Ninth District before, but ultimately won on appeal. Ask Grokster, the now-defunct file-sharing network that dissolved after a 2005 Supreme Court ruling.

You can read all of Matz’s judgment at the bottom of this post. But this excerpt, in which he argues that simply having illegal material on your site isn’t a crime, and neither is knowing about it (at least, in a general sense), gives you a good idea of Matz’s thrust and tone:

No doubt it is common knowledge that most websites that allow users to contribute material contain infringing items. If such general awareness were enough to raise a “red flag,” the DMCA safe harbor would not serve its purpose of “facilitat[ing] the robust development and world-wide expansion of electronic commerce, communications, research, development, and education in the digital age,” and “balanc[ing] the interests of content owners, on-line and other service providers, and information users in a way that will foster the continued development of electronic commerce and the growth of the Internet.”

Legal debate aside, the ruling does give a practical benefit for Veoh. It allows the company to fetch a higher price on the auction block.

CEO Dmitry Shapiro has been shopping the site to bidders over the summer, and as of a few months ago, he was willing to accept less than the $70 million investors like Time Warner (TWX), Goldman Sachs (GS) and former Disney (DIS) CEO Michael Eisner have poured into the site.

Selling a Web video site in 2009 is a tough challenge without a handicap, but the lawsuit was a big one. It was a huge time-and-money suck–Veoh may have spent as much as $6 million fighting the case in the last two years–and more important, the unresolved case was a huge liability. Who wants to buy a lawsuit?

Now, Shapiro says, Veoh’s options include not selling at all. He insists that some of Veoh’s existing backers are willing to recapitalize the company and that new investors might join in as well.

I’ll take him at his word, but if I had to bet, I’d wager that Veoh ends up getting acquired sooner than later. Maybe quite soon–the company has a board meeting today.

Wonder what they’ll talk about?

VEOH –

Still here? How about that? You get a bonus video! (But be warned: Pacino chews up a lot of scenery here, and there is some impassioned cursing.)